HC Deb 15 February 1990 vol 167 cc381-2
7. Mrs. Wise

To ask the Chancellor of the Exchequer what he estimates privatisation revenue will be in 1989–90.

Mr. Lilley

The latest estimate of net privatisation proceeds in 1989–90 is £.4¼ billion.

Mrs. Wise

Is not the Minister aware that, at the time of the previous Budget statement, the expected revenue was £5 billion? Can the shortfall be accounted for by the selling-off of water at far below its real value, and will that shortfall be a factor that will prevent the Chancellor from raising tax thresholds in accordance with the Rooker-Wise amendments?

Mr. Lilley

The hon. Lady is not correct. Water was sold at a good price, and I was glad to see that 85 per cent. of employees in the water companies participated in the sale. On the hon. Lady's second point, a Labour Government who deprived themselves of a continuing flow of privatisation proceeds would have a black hole that they would be unable to fill without higher borrowing or higher taxation of the sort that she alludes to.

Mr. Gerald Howarth

While the £4,500 million received in the present financial year is a welcome by-product of the privatisation programme, will my hon. Friend confirm that the political purpose of the programme is to release businesses from political control into the healthy private sector, where every privatised industry has performed wonders for the economy of the United Kingdom and for its staff?

Mr. Lilley

My hon. Friend is absolutely correct. We have privatised some 29 major companies, and virtually every company has increased its turnover, profits and investment and improved its industrial relations as a result. That is good for the company and good for the taxpayer because companies end up paying higher taxes—as British Telecom does—than they used to provide in dividends to the Inland Revenue.

Mr. Mullin

What shall we live on when there is nothing left to privatise?

Mr. Lilley

Should a Labour Government be elected, the problem that the hon. Gentleman envisages would come sooner. What would a Labour Government do without the proceeds of privatisation from day one? I should be interested to hear the answer to that question.

It is clear that we have increased the flow of tax revenues to the Government from those companies, because they are now more profitable, which is an on-going benefit to the country, and we have reduced the debt of the nation, which is an on-going benefit to the Exchequer as well.